Fast fashion

Women who take the time to scope out a designer online consignment shop where they can afford to purchase pieces they in the past have only dreamt of, likely are pretty stoked about fashion.

Women who take the time to scope out a designer online consignment shop where they can afford to purchase pieces they in the past have only dreamt of, likely are pretty stoked about fashion. And so when they find a site selling an exquisite item they can afford, they are likely to want it, and want it fast.

That's why when designer consignment e-retailer TheRealReal.com launched in early 2011, it focused first on mastering such back-end operations as order fulfillment and inventory management, founder Julie Wainwright says. That was an important first step because The RealReal doesn't get items in one big batch from a supplier, but rather in one-by-one shipments from consumers, buyers or boutiques. That creates a challenge for the retailer to manage incoming product inventory and outgoing orders. In-house developers spent more than seven months building the order management system, and they are still tweaking it, Wainwright says.

Tucked in the corner of its 35,000-square-foot office and warehouse in downtown San Francisco is the receiving area where The RealReal takes in about 1,000 high-end items per day arriving via FedEx and UPS.

Once in the warehouse, staffers categorize products by designer and product type, and add tags with bar codes to match items to their consigners, who get 60% to 70% of the sale price when their items sell. Staffers then photograph each product, assign prices, and upload images and descriptions to the site. When an item sells, it is automatically labeled as sold on the site and readied for shipping. Wainwright says 90% of orders leave the warehouse the day they are ordered. About 1,000 items ship daily. The process is replicated on a smaller scale at a 20,000-square-foot facility in New York.

Successfully managing this complex process is what separates The RealReal from the competition, Wainwright says. "Managing supply," she says, "is where a lot of my competitors fail."

Her well-oiled fulfillment process is paying off. The RealReal is the fastest-growing e-retailer in the Internet Retailer 2013 Second 500 Guide, bringing in an estimated $15.1 million in online sales in 2012, up from $1.4 million in 2011. In late August, The RealReal launched operations in Japan, its first of several planned international moves.